In recent years, an increasing number of transactions are being conducted over electronic mediums. Law, regulations, and industry standards have been adopted to facilitate the use of electronic records and signatures in interstate and foreign commerce. Some of these laws and regulations specify that an acceptable technology for electronic signatures must be linked to data in such a manner that if the data is changed, the digital signature is invalidated.
Many of these techniques involve peripheral devices communicatively coupled to a computer or network that can be used by the signer to authenticate a transaction. These peripheral devices are deployed in a variety of environments, from devices that are carried around to homes and businesses by individual insurance agents to counter-top retail and banking applications, to individual desktop applications, to portable applications with memory and wireless devices.
Keeping in mind the technology guidelines above, there are several technologies that appear to be capable of meeting the requirements. Generally, they fall into the categories of something you are, something you do, something you know, or something you have. Typical examples of acceptable electronic signatures include: handwritten signatures, fingerprints, iris scans, voice recording, personal identification number (PIN), hand geometry, public key infrastructure (PKI) certificates, smart cards, identification card, credit or debit card.
In considering data security and data transmission security, several techniques exist, and indeed have become commonplace to secure and encrypt data transferred between computers, networks and peripheral devices used in commerce today.
Now that peripheral devices are being used to sign contracts and capture electronic signatures, an opportunity exists to improve their effectiveness and security. This opportunity exists in both the closed systems of the past and in less structured open systems associated with individuals and small businesses.
While the prior art has attempted to provide secure transactions schemes, these schemes have various shortcomings. For example, Kapp et al., U.S. Pat. No. 5,297,202, describes a two-part encryption scheme for protecting electronic signatures. A transaction code is created and displayed as part of the transaction record. This transaction code is made-up of a first word identifying a particular merchandising location and perhaps a time identifier, and a second word that is sequentially assigned. In the first step, the transaction code is used to encrypt the signature data and provide an encrypted signature file. In the second step, secure encryption keys, known at both ends of the transaction, are then used to encrypt the resulting encrypted signature file. There are several weaknesses with this approach. First, the transaction record used to encrypt the signature is displayed with the transaction data, thereby making it susceptible to unauthorized access. Second, the transaction code is partially based on a location identifier and a sequentially assigned number, making it easier to break the transaction code by having access to previous transactions.